Vitalik Buterin Reveals: Prediction Markets Beat Social Media for Truth on Hot-Button Issues

Forget the endless scroll. Ethereum's co-founder makes a bold case for a different kind of digital discourse—one where your wallet does the talking.

The Signal in the Noise

Social media platforms thrive on outrage and confirmation bias. They're engineered for engagement, not accuracy. Buterin points to a more mercenary alternative: prediction markets. Here, users stake real capital on the outcome of future events, from elections to scientific discoveries. The financial incentive, he argues, cuts through emotional fog better than any 'fact-check' label.

Skin in the Game

It's a simple, brutal mechanism. Being wrong costs you money. Being right pays. This creates a powerful feedback loop that rewards research and punishes hot takes. While your Twitter feed amplifies the loudest voice, a prediction market surface aggregates the most financially confident opinion—a subtle but profound shift from popularity to probabilistic truth.

The Cynical Edge

Of course, it’s a system that turns truth-seeking into a speculative asset—perfect for an industry that’s already monetized trust, memes, and JPEGs of monkeys. Finally, a financial instrument for your convictions, because why have principles when you can have a position?

The implication is clear: if you want to know what people really believe, don't read their posts. Watch where they place their bets.

Can betting on Polymarket become a moral problem?

In a series of posts on Farcaster, Buterin responded to critics who questioned whether betting on tragic events like wars and deaths represents a moral failing of the cryptocurrency industry.

The discussion began when a user named Cassie criticized the practice of “gambling on whether a bunch of people are going to die,” calling it one of the reasons the crypto industry faces widespread hatred. 

Buterin countered by explaining that small-scale prediction markets focused on large events don’t create dangerous incentives for individuals to cause harm. He also pointed out that traditional stock markets carry similar risks. 

Unlike other social media platforms where sensational claims generate engagement without accountability, Buterin says prediction markets are truth-seeking environments. 

“Prediction markets as an antidote for crazy opinions on emotionally charged topics,” he wrote. 

Buterin’s point, in summary, is that, on social media, users can make dramatic predictions about wars or disasters without facing consequences if they turn out to be wrong. Mainstream media use sensational headlines that distort public perception of actual risks.

Buterin shared personal examples of checking Polymarket prices after reading alarming news headlines, only to discover that experienced participants still place the probability of that outcome at just 4%. 

He argued that prediction markets experience less manipulation from reflexivity effects, “greater fool theory” dynamics, and pump-and-dump schemes that plague cryptocurrency and stock trading because their prices are bounded between zero and one, representing 0% to 100% probability. 

Can betting on prediction markets cross a line?

Cassie questioned whether markets predicting someone’s death might actually influence outcomes rather than simply following information, asking directly if Buterin was “okay with that.”

“Yeah, that’s an assassination market. I oppose those.” Buterin responded.

He went on to list several measures that prevent such markets from functioning effectively, including supporting “social norms that weaken oracles to make such markets break more.” 

As examples, he referenced Augur’s historical “vote unethical” design feature, which allowed participants to invalidate markets deemed inappropriate.

Buterin suggested that journalistic standards play a role by avoiding publishing details of death that make such markets easy to resolve. He proposed that if assassination markets became a bigger problem, making it simple for people to fake their deaths temporarily and claim rewards themselves could help break the incentive structure.

This is not the first time Buterin has defended the right to wager on events via prediction markets like Polymarket. Last year, as reported by Cryptopolitan, he shared similar thoughts about the moral and ethical questions surrounding certain markets, referencing the Israel-Hezbollah war at the time.

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.